Construction spending rose slightly in April

WASHINGTON 
Builders began work on more home-remodeling projects in April. But the increase barely lifted construction spending above its lowest level in more than a decade, a sign that the troubled industry remains too weak to help the economy.

Construction spending rose 0.4 percent in April, the Commerce Department reported Wednesday. The strength came from a big percent jump in spending on home improvement projects. That helped offset declines in single-family homes and apartment construction.

The overall increase followed a tiny 0.1 percent rise in March and pushed construction spending to a seasonally adjusted annual rate of $765 billion. That was up just 0.5 percent from an 11-year low of $761 billion hit in February.

Builders pushed activity on private projects up 1.7 percent to a seasonally adjusted annual rate of $483 billion in April.

Residential spending rose 3.1 percent. But all of that strength came from spending on home remodeling. People are spending more to remodel rather than move to new homes in the current weak climate for housing. Construction of single-family homes dropped 1 percent in April and spending on apartment construction fell 0.1 percent.

Nonresidential construction rose 0.4 percent, though construction of offices, hotels and shopping centers all declined. The strength came from increases in spending on health care, schools and power plants.

Government construction projects dropped for a seventh consecutive month to a seasonally adjusted $282 billion annual rate. That was the lowest level since April 2007. Spending at the federal level fell 2 percent to $29.3 billion.

Spending on state and local projects fell 1.9 percent to $252.8 billion. Activity at this level is at the lowest point since December 2006. State and local governments have been cutting back on building projects as they deal with large budget deficits.